RETIREES FIRST Act in plain language
1: Short title
This section states that the Act may be cited as the Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simpler Taxes Act, or the RETIREES FIRST Act.
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1. Short title This Act may be cited as the Reducing Excessive Taxation and Inefficiencies by Reforming Elder Exemptions to Support Fairness, Inflation Relief, and Simpler Taxes Act or the RETIREES FIRST Act .
2: Increase in threshold amounts for inclusion of Social Security benefits in income
This section would rewrite how Social Security benefits are counted as taxable income under section 86 of the Internal Revenue Code. For a taxpayer described in section 86(b), gross income for the year would include Social Security benefits in an amount equal to the lesser of 85 percent of the benefits received during the year, or 85 percent of the excess amount described in section 86(b)(1). This inclusion would apply despite section 207 of the Social Security Act. This section would also rewrite the base amount used in that calculation: $34,000 for an individual return, except as otherwise provided in the subsection; $68,000 for a joint return; and zero for a taxpayer who is married as of the end of the taxable year, does not file a joint return for that year, and does not live apart from their spouse at all times during the year. For taxable years beginning after 2025, each of these dollar amounts would be increased every year by a cost-of-living adjustment, figured the same way as the existing adjustment under section 1(f)(3) of the Code but substituting calendar year 2024 for calendar year 2016 as the base year; if the resulting amount is not a multiple of $1,000, it would be rounded to the nearest $1,000. This section would also appropriate money from the Treasury, for each fiscal year, to each fund under the Social Security Act and to each fund under the Railroad Retirement Act of 1974, in an amount equal to whatever reduction in transfers to that fund results from these amendments, so the trust funds are not reduced because of this tax change. These amendments would apply to taxable years beginning after December 31, 2025.
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2. Increase in threshold amounts for inclusion of Social Security benefits in income (a) In general Subsection (a) of section 86 of the Internal Revenue Code of 1986 is amended to read as follows: (a) In general Gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act ) includes Social Security benefits in an amount equal to the lesser of— (1) 85 percent of the Social Security benefits received during the taxable year, or (2) 85 percent of the excess described in subsection (b)(1). . (b) Base amount Subsection (c) of section 86 of such Code is amended to read as follows: (c) Base amount (1) In general For purposes of this section, the term base amount means— (A) except as otherwise provided in this subsection, $34,000, (B) $68,000 in the case of a joint return, and (C) zero in the case of a taxpayer who— (i) is married as of the close of the taxable year (within the meaning of section 7703) but does not file a joint return for such year, and (ii) does not live apart from his spouse at all times during the taxable year. (2) Inflation adjustment (A) In general In the case of any taxable year beginning after 2025, each of the dollar amounts in paragraph (1) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any amount determined under subparagraph (A) is not a multiple of $1,000, such amount shall be rounded to the nearest multiple of $1,000. . (c) Social Security trust funds held harmless There are hereby appropriated (out of any money in the Treasury not otherwise appropriated) for each fiscal year to each fund under the Social Security Act or the Railroad Retirement Act of 1974 an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of the amendments made by this section. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.
3: Reallocating non-security discretionary appropriations to support retiree tax relief
This section would set up an automatic rescission (cut) of federal discretionary spending tied to the cost of the tax change in section 2. Starting in fiscal year 2027 and each fiscal year after, once appropriations have been made available through September 30 of that fiscal year for the entire federal government, and subject to the exclusion described below, an amount equal to that year's total cost would be rescinded on a pro rata basis from amounts made available through regular appropriation Acts. A regular appropriation Act means an annual appropriation Act, as described in section 105 of title 1, United States Code, that provides new budget authority, as defined in section 3 of the Congressional Budget and Impoundment Control Act of 1974, for programs, projects, and activities under the jurisdiction of a subcommittee of the Senate Committee on Appropriations; this term also includes a title, division, or other subdivision of an Act or resolution that would itself qualify as such an Act if it were separate, and a resolution or Act, or a title, division, or other subdivision of one, that makes continuing appropriations for all or part of a fiscal year. The rescission would not apply to discretionary appropriations in the security category, as defined in section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985. Total cost means an amount, determined by the Secretary of the Treasury, equal to the total reduction for that fiscal year in transfers to each fund under the Social Security Act and each fund under the Railroad Retirement Act of 1974 that results from the amendments made by section 2(b) of this Act, figured without regard to any appropriation made under section 2(c). Not later than January 1, 2028, and annually after that, the Director of the Office of Management and Budget would have to publish a report detailing any rescissions made under this section with respect to the most recently completed fiscal year.
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3. Reallocating non-security discretionary appropriations to support retiree tax relief (a) Rescission Subject to subsection (c), for fiscal year 2027, and each fiscal year thereafter, effective on the day after the date on which appropriations are made available through September 30 of the applicable fiscal year for the entire Federal Government, there is rescinded an amount equal to the total cost for such fiscal year, on a pro rata basis, from amounts made available through regular appropriation Acts. (b) Regular appropriation Act For purposes of this section, the term regular appropriation Act — (1) means an annual appropriation Act (as described in section 105 of title 1, United States Code) providing new budget authority (as defined in section 3 of the Congressional Budget and Impoundment Control Act of 1974 ( 2 U.S.C. 622 )) for the programs, projects, and activities under the jurisdiction of a subcommittee of the Committee on Appropriations of the Senate; and (2) includes— (A) a title, division, or other subdivision of an Act or resolution that, if it were a separate Act, would be an Act described in paragraph (1); and (B) a resolution or Act, or a title, division, or other subdivision of a resolution or Act, making continuing appropriations for all, or a portion of, a fiscal year. (c) Exclusion Subsection (a) shall not apply with respect to any discretionary appropriations included in the security category (as defined in Section 250(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 ( 2 U.S.C. 900(c) )). (d) Total cost For purposes of this section, the term total cost means, with respect to a fiscal year, an amount (as determined by the Secretary of the Treasury) equal to the total reduction in the transfers to each fund under the Social Security Act or the Railroad Retirement Act of 1974 for such fiscal year by reason of the amendments made by section 2(b) (as determined without respect to any appropriation made pursuant to section 2(c)). (e) OMB report Not later than January 1, 2028, and annually thereafter, the Director of the Office of Management and Budget shall publish a report detailing any rescissions made under this section with respect to the most recently completed fiscal year.